CARES Act and Retirement Savings Contribution Credit

[MamaMona]

How does the "Did [you] receive any distributions from a retirement plan after 2018?" question affect the Saver's Credit question? Should "yes" be selected if the amount of the 401K was withdrawn, after the loss of a job in 2020?

[Critter-3]

YES ... if you had a distribution reported on a 1099-R and if you did not repay it or roll it into another 401K or IRA within 60 days then you answer YES to that question. 

[MamaMona]

Thank you. Got a 1099-R last year, but not this year. Opted to pay the interest and penalty on it the same year received (2020) taxes. Does that change anything?

[MarilynG1]

Receiving a 1099-R in 2020 and reporting it on your 2020 return would not disqualify you from receiving the Saver's Credit in 2021.

If you made contributions to a 401K in 2021, and the amount is shown on your W-2 in Box 12, TurboTax will pick this up when you enter your W-2 to see if you qualify for the credit. Remember the credit can only be applied to tax you owe.

Click this link for more info on the Saver's Credit.

[Critter-3]

The saver's credit has a look back function ... a 1099-R distribution in 2020 will indeed stop the 2021 form 8880 credit ... just READ the form.